Index might stay weak on US rating cut
By Richard Fu |
August 8, 2011, Monday
|
Print Edition
Print Edition
CHINA'S main stock index may stay weak this week amid increasing concerns about the outlook for global growth after Standard & Poor's downgraded the United States' top-notch credit rating, but analysts ruled out a major plunge in Chinese stocks.
The Shanghai Composite Index, which tracks both A shares and B shares, fell 2.79 percent last week to 2,626.42 points - its third consecutive weekly loss. Last Friday, the index slumped 2.2 percent as it joined the rout in Asian bourses as concerns grew about the US growth outlook and the spreading debt crisis in Europe.
S&P announced late Friday US time a cut in the US's credit rating from AAA to AA-plus, sending a shiver through the global financial system.
Galaxy Securities analyst Yin Xiaobin said the Chinese market may continue to be weak amid turbulence in overseas markets, but ruled out a slump because the index could see support at 2,600 points.
Qian Qimin, a strategist at Shenyin Wanguo Securities, saw external factors as a influence on the domestic market because "in the short run, the market can't find much traction internally." He forecast the index between 2,500 and 2,700 this week.
China is due to release July's Consumer Price Index data this week and economists see inflation to stay high.
This may trigger speculation that another interest hike is in the pipeline, Qian said.
The Shanghai Composite Index, which tracks both A shares and B shares, fell 2.79 percent last week to 2,626.42 points - its third consecutive weekly loss. Last Friday, the index slumped 2.2 percent as it joined the rout in Asian bourses as concerns grew about the US growth outlook and the spreading debt crisis in Europe.
S&P announced late Friday US time a cut in the US's credit rating from AAA to AA-plus, sending a shiver through the global financial system.
Galaxy Securities analyst Yin Xiaobin said the Chinese market may continue to be weak amid turbulence in overseas markets, but ruled out a slump because the index could see support at 2,600 points.
Qian Qimin, a strategist at Shenyin Wanguo Securities, saw external factors as a influence on the domestic market because "in the short run, the market can't find much traction internally." He forecast the index between 2,500 and 2,700 this week.
China is due to release July's Consumer Price Index data this week and economists see inflation to stay high.
This may trigger speculation that another interest hike is in the pipeline, Qian said.
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